Traditional approaches to school readiness have focused on academic domains, yet more recently, evidence has accumulated suggesting that children's social relationships play crucial roles in their school success. An undeveloped area of inquiry in considering school readiness is the nature of peer relationships that children have prior to entering school. Despite a wealth of research on the influence of peers once children have entered school, especially in the later school years, little work has been done examining their importance in preparing children for school. Our previous work on the structure and pattern of these early childhood peer groups suggests that the same-sex segregation that occurs during play among children may have wide-ranging consequences for their preparation for school. The purpose of the present research is to address this gap in the literature by focusing on a neglected area concerning the roots of early school success, namely, the role of gender in young children's peer relationships. Because young children spend most of their time playing in same-sex peer groups, the experiences and influences they encounter likely vary for boys and girls, and they may contribute to early school adjustment. However, little is known about how these different experiences relate to early school adjustment. Given the large amounts of time that children spend playing in same-sex peer groups, it is important to understand the effects of these experiences on development. The major goal of this project is to evaluate the role of preschool children's sex-segregated peer relationships in influencing their school readiness and their academic, psychological, and social adaptation to school entry. The longitudinal data to be collected will be used to test hypotheses about the qualities, trajectories, and dynamics of children's preschool same-sex peer relationships that facilitate and hinder their attitudes, skills, performance, interest, and conduct related to the transition to formal schooling. We plan to conduct this research with a group of children who are at risk in regard to school readiness and adjustment to formal schooling, namely young children from low-income households, including a sizeable number of Hispanic children and families.